Medicines Australia Provides Additional Submission to Senate Inquiry on Corporate Global Tax Issues
Australia’s innovative medicines industry body has provided a supplementary submission to the Senate Inquiry into Corporate Tax Avoidance addressing several issues raised at the public hearing in Sydney this month.
Global tax arrangements such as transfer pricing are complex measures which are easily misunderstood. This can unfortunately lead to confusion within the community and erode public confidence in Australia’s robust, transparent tax system.
Medicines Australia’s supplementary submission aims to address a number of key misconceptions which have arisen from the July hearing in which a number of member companies provided detailed answers to the Senate Economics References Committee.
The submission gives a detailed breakdown of the rules relating to transfer pricing and the ‘arms length’ principle, comparative pricing, and Advanced Pricing Agreements (APAs) with the Australian Taxation Office (ATO). It also seeks to clarify the role of Senior Executives in the pricing process and also outlines how the PBS provides a government subsidy to patients not companies.
Medicines Australia is determined to eradicate these misconceptions which have been left to stand without scrutiny.
More than fourteen thousand people work for our member companies in Australia. They take great pride in their work which helps to provide the most innovative medicines and vaccines to the Australian people.
While it is the responsibility of Senators and Members of Parliament to set laws and determine what is an appropriate, fair and just tax system; it is the responsibility of the community, including business, to always adhere to that law.
Medicines Australia member companies view and undertake their tax, legal and community obligations with the utmost care, diligence and responsibility. They are valuable, ethical contributors to the Australian economy and the ongoing health and wellbeing of our community.
The submission also makes it clear that the Medicines Australia Code of Conduct is strong and effective in addressing matters of conduct (including overseas examples raised) and bringing about ethical behaviour. Our members take great pride in the Code of Conduct which is now 55 years strong and represents the gold standard in Australia for ethical, responsible industry self-regulation.
The supplementary submission aims to provide the community with greater clarity and confidence in the Australian tax system and the ongoing work of our member companies to pay the right and fair amount of tax.
A competitive tax system and stable policy setting is vital for Australia to attract more investment into the various stages of research and development, clinical trials, access to medicines in Australia, more jobs and to capitalise on potential growth in export markets.
All of this would result in increased economic activity, productivity and ultimately, higher tax revenues for Australia.
However, if unilateral action is taken on tax policy, there is significant risk to the long term viability of the pharmaceutical industry in Australia.
A copy of the supplementary submission to the Senate Economics References Committee into Corporate Tax Avoidance is available on the Medicines Australia website at https://medicinesaustralia.com.au/policy/publications/submissions/
Phone: 0423 239 265
Phone: (02) 6122 8503